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DOMS Industries IPO

08 Dec 2023

Introduction:

Initial Public Offerings (IPOs) present attractive opportunities for both seasoned and novice investors in the dynamic world of investments and stock markets. They allow you to buy shares of promising companies at affordable prices and make high long-term profits. Even if you do not get the allotment, you will receive a refund of your investment.

One such IPO creating buzz in financial circles is the DOMS Industries IPO. Belonging to a stationery and art products manufacturing company, the IPO plans to raise up to Rs. 1,200 crores from public investors. Continue reading to delve into the key aspects of DOMS Industries IPO, including issue size, lot size, price band, subscription dates, etc.

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About the Issuing Company

As mentioned, DOMS Industries Limited is engaged in manufacturing, developing, and selling a wide range of stationery and art products under the brand name “DOMS”. The company’s product portfolio can be categorized into seven segments – scholastic stationery, scholastic art material, paper stationery, kits and combos, office supplies, hobby and craft, and fine art products.

The company has an extensive distribution network with a strong pan-India presence as well as a global footprint. As of 30 September 2023, the company had a business presence in more than 45 countries across America, Africa, the Middle East, Europe, and Asia Pacific. Additionally, it has exclusive tie-ups with specific entities of the FILA Group to distribute and market its products in several South Asian countries.

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Key Strengths of the Company

Analysing the key strengths of the issuing company can give you an idea of its future growth prospects and help you make an informed IPO investment decision. The strengths of DOMS Industries Ltd. (as highlighted in the RHP) include:

  • With a market share of more than 12% (for FY23), the company is the second-largest player in India’s branded stationery and art products market
  • The brand name “DOMS” is popular among the target customers. It’s known for delivering high-quality and innovative products
  • The company has a robust manufacturing facility with state-of-the-art infrastructure
  • An extensive multi-channel distribution network helps in the seamless supply of products across domestic and international markets
  • Exclusive tie-ups with specific entities of the FILA Group for product distribution in South Asia

Key Risks and Weaknesses Highlighted

The risks of weaknesses of a company can hinder its long-term growth and be red flags for IPO investors. Below are the key risks or weaknesses associated with DOMS Industries Ltd.:

  • The company is highly dependent on the sale of certain key products for its revenues
  • The absence of formal contracts or exclusive agreements with suppliers can hurt the supply of raw materials
  • One of the listed peers has filed an outstanding civil litigation against the company
  • The company operates in a highly competitive industry where there can be no single winner

Core Financials of the Company

Investors often scrutinise the issuing company’s financial health and past performance before investing in its IPO. A careful analysis of the financials can provide valuable insights into a company’s stability and growth potential.

The table below depicts the key financials of DOMS Industries Ltd. for the last three financial years:

Particulars For the Period Ended Sept 2023 As of and for FY Ended March 31
2023 2022 2021
Share Capital 56 0.4 0.4 0.4
Net Worth 398 337 247 234
Total Borrowings 176 100 85 97
Revenue From Operations 762 1,212 684 403
EBITDA Adjusted 127 187 70 30
Profit After Tax 74 103 17 -6
Earnings Per Share (Diluted) 13 18 3 -1
Return on Net Worth 18% 28% 6% -4

*Amount in Crores

Source – RHP dates 2 December on the SEBI website

Key IPO Details

The DOMS Industries IPO opens for public subscription on Wednesday, 13 December 2023, and closes on Friday, 15 December 2023. It will be a combination of a fresh issue and an offer for sale cumulatively worth Rs. 1,200 crores. Retail investors can apply for a minimum of 18 shares (and in multiples thereof) in the price band of Rs. 750 to Rs. 790. More details of the IPO are depicted in the table below:

IPO Date 13 December to 15 December 2023
Basis of Allotment 18-Nov
Listing Date 20-Nov
Face Value Re. 10 per share
Price Band Rs. 750 to Rs. 790
Lot Size 18 shares
Total Issue Size Rs. 1,200 crores
Fresh Issue Rs. 350 crores
Offer for Sale Rs. 850 crores
Issue Type Book Built Issue
Listing At NSE, BSE

To conclude

Prima facie, the DOMS Industries IPO seems attractive with robust financials and decent valuation. However, you must consider other factors such as your investment goals and prevailing market conditions before making your final investment decision. Motilal Oswal offers free Demat accounts for seamless IPO investments.

 

Related Articles:  How to Analyse an IPO | What is IPO Grading? | What is Cut Off Price In IPO Application 

 

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